The Great Depression was not President Hoover's fault but he had to carry all the pots, just because the beliefs were different and the opposite was true

Herbert Clark Hoover was the 31st President of the United States, serving from 1929 to 1933. The Great Depression, which began in August 1929, devoured the rest of his presidency.

Hoover was an advocate of laissez-faire economics. He believed that a capitalist-based economy was self-correcting. He believes that financial aid will stop people from working. He believes that commercial prosperity will permeate ordinary people. This philosophy had no effect on the Great Depression. He failed to end the Great Depression, leading to defeat to Franklin D. Roosevelt and Roosevelt's New Deal in the 1932 presidential election.

As a result, many of his achievements were overlooked. For example, in 1931, he signed a law to make the Star-Spangled Banner the U.S. national anthem. A self-made millionaire, he donated his presidential salary to charity. He also saved millions of people from starvation during the two world wars.

Herbert Hoover served as President of the United States in the early years of the Great Depression.

He tried to end the Great Depression with a "laissez-faire" approach, but that didn't help the economy much.

While Herbert Hoover was often blamed for the Great Depression, many of the causes of the economic collapse existed before he was elected.

What did Hoover do to end the Great Depression?

Hoover tried many tactics to combat the Great Depression. He encouraged business leaders to retain workers. He gave public speeches several times to instill confidence and prevent panic. Hoover argued that the federal government should not manipulate prices, control businesses, or manipulate the value of currencies. He believed that these would lead to socialism.

In 1929, he cut taxes. He cut the top tax rate from 25 percent to 24 percent.

In December 1930, he raised it to 25 percent.

In 1930, Hoover vetoed several bills that would provide direct relief to troubled Americans. In his 1930 address to Congress, he explained: "Through raids on public finances, there is no way to restore prosperity." Instead, he protected businesses by signing the Smoot-Hawley Tariff Act. It was supposed to protect farmers, but ended up with a 40 percent tariff on 900 products. That year, U.S. gross domestic product fell by 8.5 percent. The unemployment rate is 8.7 per cent.

In 1931, other countries retaliated with their own tariffs. The resulting trade war reduced international trade by 67 percent. GDP grew by 6.4 per cent and the unemployment rate rose to 15.9 per cent.

In 1932, the economy shrank by 12.9 percent. But Hoover raised the top interest rate to 63 percent to reduce the deficit. His commitment to a balanced budget exacerbated the Great Depression.

In 1932, Hoover approved the rebuilding of the Finance Corporation to prevent further bankruptcies.

By 1933, it had paid $2 billion to bankrupt banks, railroads, and a number of other businesses. Effectively prevent business bankruptcy. In July, the Emergency Relief Act authorized RFCs to provide funds to states to feed the unemployed and expand public works. Hoover argued that states should provide insurance for the unemployed. He was against too much federal intervention.

Hoover signed the Tax Act of 1932. Raise the maximum income tax rate to 63 percent. He wants to reduce the federal deficit. Hoover believed that this would also restore faith. Instead, higher taxes exacerbated the Great Depression. Gdp grew by 12.9 per cent and the unemployment rate fell by 23.6 per cent.

Does Hoover suffer from depression?

Before Hoover took office, the causes of the Great Depression were in place. The stock market is very volatile. Its value has increased by 20% per year since 1924. The number of shares traded doubled to 5 million shares per day. People buy stocks "on margin". They only need to provide 10%-20% of the funds and the broker lends him the remaining balance. When the stock price rises, they become millionaires. But when the market crashes, they immediately become poor.

The Fed used tight monetary policy to defend the gold standard. Instead, it was supposed to lower interest rates to fight recession. In August 1929, the Fed raised the discount rate by 6 percent from 5 percent, making loans more expensive when banks needed cheap money.

Only one-third of the nation's 24,000 banks belong to the Fed banking system. Non-members rely on each other to hold reserves. They are vulnerable to bank runs, while depositors scramble to withdraw their savings. Banks only hold 10% of all deposits, so they can lend out the rest of their deposits.

In 1930, the Bank of Tennessee collapsed. This led to the collapse of the affiliated bank in the coming days. By the end of the year, 1,300 banks had failed. The money supply was reduced due to the collapse of banks because less credit was available. That means every dollar is more valuable. As the dollar appreciates, prices fall. This reduces the income of the business, and higher interest rates mean that the cost of debt is higher and lenders can repay the debt. This has created a knock-on effect of personal and corporate bankruptcy.

Hoover was powerless to stop the dust storm drought, which was another major cause of the Great Depression. It was a 10-year drought that affected 23 states from the Mississippi River to the Mid-Atlantic region. It was the worst drought in 300 years. Farmers are unable to produce enough food due to crop failures. Hoover asked the Red Cross for help. It provided $5 million for seeds. As the crisis worsened, Congress allocated $45 million for seeds and $20 million for food boxes. But the drought was too severe to really help. The only crop that can grow is radish.

His concern about budget balance, while commendable, was not the right time. He should not impose tariffs that undermine trade.

Why Hoover was blamed

People mistakenly blame Hoover for the Great Depression, because the Great Depression occurred after he took office. In 1930, unemployment rose, dust bowls destroyed farms in the Midwest, and people lost their homes. Many travel to California, where they think they can find work. Instead, they live in their cars or shantytowns, known as Hooverville.

People attach Hoover's name to many of the signs of the new poor. The Hoover Blanket is a newspaper used in winter to cover the homeless. The "Hoover Flag" is an empty trouser pocket pulled from the inside out to show a lack of money. "Hoover leather" is a cardboard that replaces worn-out soles. The "Hoover carriage" is a horse-drawn car because gasoline is too expensive.

In 1932, thousands of World War I veterans established Hooverville in Washington, demanding that promised government bonuses be paid in advance. The government refused, claiming budget constraints. When the veterans refused to leave, Hoover sent troops, which set fire to Hooverville and drove the group out of the city with bayonets and tear gas, further turning the populace against Hoover.

Hoover and Debt

The Great Depression destroyed Hoover's hopes of balancing the budget. Hoover added a $1 billion surplus in 1930, but it didn't last. By the end of his term, he had added $6 billion in debt, a 33 percent increase.